#8

Thirsty Cactus Corp. just paid a dividend of $1.60 per share. The dividends are expected to grow at 40 percent for the next 10 years and then level off to a 7 percent growth rate indefinitely. Required : If the required return is 12 percent, what is the price of the stock today?

a. $393.10

b. $7.49

c. $377.68

d. $318.88

e. $385.39